Ecuador, Colombia spat escalates, could hurt trade

QUITO, (Reuters) – Ecuador has slapped import  duties on hundreds of Colombian goods and has sought the arrest  of a key Colombian politician, raising concerns that already  tense relations between the Andean neighbors could worsen.

The countries cut diplomatic ties in March 2008, after  Colombian forces killed 25 people in an anti-guerrilla raid in  Ecuador. Colombian President Alvaro Uribe later accused Ecuador  of harboring terrorists, and Ecuadorean President Rafael Correa  called Uribe a dictator.

This week, Correa introduced import duties on some 1,400  Colombian products, arguing that Colombian exporters are taking  advantage of their weak currency to flood Ecuador with goods. Earlier this month, Ecuador asked Interpol to arrest the  Colombian defense minister at the time of the raid, Juan Manuel  Santos, who may run for president next year. Interpol said no.

Patrick Esteruelas, an analyst with the Eurasia Group, said  that although both countries are to blame for the break down in  relations, Ecuador is throwing most of the punches.

“The Ecuadorean administration has been particularly guilty  in prolonging this conflict. President Correa has time and  again ignored Colombian government efforts to turn the corner  and extend a olive branch,” he said.

“There doesn’t seem to be any real effort to find some  common ground and now it’s beginning to spill over to  commercial relations as well,” Esteruelas said.

Oil-rich but cash-strapped Ecuador is struggling to find  ways to prop up its economy. Export income has fallen due to  low petroleum prices caused by the world economic crisis.